Swisher Hygiene's (SWSH) CEO Bill Pierce on Q2 2014 Results - Earnings Call Transcript

| About: Swisher Hygiene, (SWSH)

Swisher Hygiene Inc. (NASDAQ:SWSH)

Q2 2014 Results Earnings Conference Call

August 12, 2014 08:30 AM ET


Garrett Edson - ICR

Bill Pierce - President and CEO

Blake Thompson - Chief Operating Officer

Bill Nanovsky - Chief Financial Officer


Andrew Wittmann - Robert W. Baird


Good day, ladies and gentlemen, and welcome to the Swisher Second Quarter 2014 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this call may be recorded.

I would now like to introduce your host for today’s conference, Mr. Garrett Edson. You may begin your call, sir.

Garrett Edson

Thank you, Demetrius. By now everyone should have access to our earnings announcement and Form 10-Q, which were filed earlier and can be found at swsh.com under the Investors section. Before we begin our formal remarks, I need to remind everyone this conference call may include forward-looking statements regarding Swisher Hygiene, Inc., its business and prospects.

This forward-looking information is subject to risks, uncertainties and other factors that may cause actual results and performance to materially differ from results or performance expressed or implied by the forward-looking information.

Swisher undertakes no obligation to publicly revise the forward-looking information presented except as acquired by law. Also, our discussion today may include references to certain non-GAAP measures, reconciliation of these measures to the most comparable GAAP measure can be found on our website at swsh.com under the Investors section.

At this time, I'd like to turn the call over to Bill Pierce, President and Chief Executive Officer of Swisher.

Bill Pierce

Thank you, Garrett, and good morning. Our Chief Operating Officer, Blake Thompson and Chief Financial Officer Bill Nanovsky are participating with me on today's call and will be available later in the call to answer questions.

Our second quarter sales continue to drive year-over-year improvements in our cost structure despite lower year-over-year revenue. We will spend a fair amount of time on today's call discussing the rebuilding of our sales pipeline, continue our transition toward a more profitable customer base. The status of our salesforce reorganization, performance trends and our products and service revenue lands as well as pricing and expectations for revenue improvement in the second half of the year.

Revenue decreased $5.4 million in the second quarter of 2014 compared to the prior year quarter. While cost of sales route expense and SG&A decrease 10 million and capital expenditures were down 2.5 million from the prior year period. Cash and cash equivalents decreased 4.2 million in the second quarter and the company also took a non-cash goodwill impairment charge of $5.8 million in the quarter.

Total net loss for the quarter was $0.86 per share negative or $0.47 negative per share excluding all impairment charges compared to $0.88 negative in Q2 2013. But our adjusted EBITDA loss was 2.1 million for the quarter compared to 4.7 million for the second quarter of 2013. Bill Nanovsky will take you through the financials in more detail later in the call.

Despite generally soft conditions in a number of our core into markets in the first half of 2014. We continue to win new business and see the positive impact of our selling through service focus. We expect improving fundamentals in the marketplace in the second half of the year in our core markets which should provide a platform for the year-over-year revenue growth, we've been working towards so diligently.

Furthermore, we are pleased to report the completion of the settlement of our U.S. class action lawsuit earlier in August. I would like to invite Thompson at this time to breakdown the revenue components I outlined earlier and talk about the expectation for the second half of the year. Blake?

Blake Thompson

Thank you, Bill. I will be providing a detail on our revenue performance for the second quarter and then discuss the outlook for revenue for balance of year. I will also provide an update on our ongoing efforts, building out our sales and service organization capability, driving our value proposition and transforming efforts and creating an effective selling and service culture. These are essential elements for our short and long term success in obtaining and sustaining profitable growth.

As we've discussed on prior calls, our challenge in creating this cultural foundation is aligning people process and tools from over 150 acquired companies into ones which our operating model.

For the second quarter, revenue declined 10% from the prior period, although was up 3% from the first quarter of 2014. Adjusting for revenue loss due to sale select at linen and hygiene customers excluding assets held but not sold, revenue declined 5% from the prior period, primarily due to our products category paper and other ancillary products and hygiene services.

In the second quarter, we completed the sale of additional assets held for sale primarily linen, some select hygiene services and goods customers. We sold another segment of this business in early July and have one final segment to sale in Q3. We're anxious to get these asset sales behind us to allow our field sales and service teams in these impacted markets to fully focus on our core business.

We’re encouraged by our core chemical products and equipment category showing a slight year-over-year revenue improvement as compared to a 10% decline for the first six months of 2013. When you look at the broader business, there are additional encouraging revenue trends that have flowed into July. Lower revenue loss from customer churn; accelerated new customer revenue; growth of our existing base revenue; improving growth trends at several key distributor partners; and key sales geographies that are growing as opposed to being flat or declining last year.

We believe our revenue declines for the first half of 2014 have come from our hygiene and remaining linen business. Some of this is attributable to collateral losses as we unwound unprofitable linen business.

We saw our core chemical business improve in the first half of 2014 versus the declining trend in the first half of 2013. The trends with lost, new and base although improving are not yet at the level to turn our year-over-year revenue positive.

We have specific actions built into our selling to service efforts to specifically address the gaps with hygiene losses and to further accelerate the positive trends we see in total with our churn, our new and our base revenue.

Let me now update you on our progress in building out this foundation. Our sales reorganization, we commenced in late 2013, continues on pace. We placed regional sales directors reporting to a single VP of sales aligned with each of our four region sales and service organizations and allowing us to concentrate on key customers, geographies and products and services to drive a more formalized disciplined customer pipeline process.

As this process evolves, we’re identifying opportunities to reallocate resources and in between key geographies to ensure we have the right focus on regional change, our main distributor partners and accelerated growth potential in key markets.

As an example, we are dedicating a senior sales resource to support the development of effective growth strategies in each of our key hygiene markets. How will this help us? For assistance, we recently became and approved hygiene vendor for a large retail channel that has an excess of 8,000 locations, access to these locations is on a district-by-district basis and we are across winning the business one district at a time requiring a dedicated resource consistently working with this customer.

We have other existing relationships similar with similar customers that we’ve not taken advantage of in the past, because we’ve lacked that dedicated resource. The sales realignment is also improving our strategic approach by bringing on the right geographic mix of customers ensuring we can fully execute against our service excellence commitment. It enables our field sales and service teams to more effectively executing its customer retention and growing existing customers. It also supports our efforts in on-boarding customers that recognize and value the service proposition we’re bringing to them.

We have geographies that will benefit by including a higher percentage of larger customers and with their existing base of customers. For example in our Northeast region, it was historically had fewer larger customers like assisted living facilities hotels and hospitals and now that opportunity to accelerate their market penetration through new restaurant customers.

Our Southeast region is historically focused on more of a single rooftop restaurant customers and now has an opportunity to improve on a customer mix to grow faster, improve their operating margins with targeting hotels, assisted living facilities and hospitals.

Our value proposition and competitive differentiator is our service excellence commitment to our customers, which is helping us exceed at winning new business. Some recent examples include our engagement with two new distributors in the Northeast and a task where they moved existing accounts and some new accounts to us. We have executed against our service excellence commitments and are continuing to expand our footprint both distributors.

We won a new contract for 35 additional rooftops of the multiunit restaurant chain where we were already servicing half of the units. Our service edge won us the business for the additional units over our competitor. We just closed on a deal for four unit chain of specialty restaurants that we will be installing over the next few months.

This trend repeats itself as we continue to win new business with a high end hotel chain primarily through endorsements on service levels at properties we already serve in that chain. We also continue to have success as we target and bring on new assisted living customers in many of our markets. I was in one of our western markets a few weeks ago and spent a day with one of our account managers who recently brought on a customer that owns 9 assisted living facilities. This same account manager expanded our relationship with another assisted living customer from 6 facilities to 13 all because of the service levels delivered to the existing facilities.

Our field sales and service teams are continued to focus on the culture change around service excellence and we are holding ourselves to a higher standard on the quality of the service we perform. We coaching and challenging our account managers and hygiene supervisors to leverage service excellence to cross sell cleaning solutions into existing customers.

These are the team members that ultimately accelerate our trend in reducing lost customers and increasing our existing base revenue growth. We are maintaining our price integrity this year to offset cost, improve targeted customer margins and ensure a fair return for our value preposition offering.

When a customer is not profitable and our objectives do not align, we work with them to gain a fair value in alignment or we may lose the business. We know that not every customer will make a good partner for us, but we are keenly aware of the value that we provide our customers through helping them improve their operational efficiencies and their brand in it with their value gets in customers.

We believe the quality customers are just as important as quality service. We are there when they need us with service record and planning solutions. We have not yet generated year-over-year growth, revenue growth but we have some encouraging trends carrying into the second half of the year including improving and growing pipeline quality and quantity decelerating loss customer churn increased revenue from new customers a growing revenue based with existing customers and improving in our core chemical product revenue.

We still have much work to do in building out our sales and service organization capability and we'll continue a final manufacturing consolidation initiative will occur at the end of Q3 and should improve our overall gross margins as well as simplify our field operations. We will keep our other efficiency initiatives on course for the remainder of the year, but our primary focus will be on revenue growth.

Finally, we continue to be diligent in executing our plans for revenue growth, our underlying key indicators give us confidence that we're making solid progress. As with our recently successful efficiency initiatives, we believe we will deliver the same outcomes with similar efforts on revenue growth. We're creating a culture for profitable growth should be sustainable along the long haul.

And now I'll turn the call over to Bill Nanovsky to discuss financials for the quarter.

Bill Nanovsky

Thanks Blake and good morning to our shareholders. The revenue softness from the prior year continued to be impacted by the sale of non-core businesses during the previous four quarters and customer turnover. Excluding revenue generated in the second quarter of 2013 from assets that were sold or held for sale, revenue for the second quarter of 2014 declined 5% from the prior year. Cost of sales for the second quarter of 2014 improved 6% from the prior year. However as a percentage of revenue cost of sales saw 190 basis points increase from the second quarter of 2013.

The increase reflects $500,000 related to a realignment of freight costs previously classified in SG&A, the loss of linen margins associated with the assets sold in our overall revenue base. Second quarter lab expenses declined 11% from the prior year. As a percentage of revenue quarterly lab expenses were down 45 basis points from 2013, despite the decline in revenue driven mostly by our lab optimization and our operating standardization initiatives.

SG&A expenses were down 7 million or 29% from the second quarter of '13. Excluding unusual expenses in the second quarter of '13 SG&A expenses declined $5.5 million or 24% from the prior period. This decrease reflects the $500,000 related to the realignment of freight costs, reduced compensation expenses, lower professional fees, ongoing cost efficiencies, a reduction in stock-based compensation and the sale of our non-core linen assets. We are very pleased with our cost efficiency initiatives continue to make a mark difference in our cash flows.

During the second quarter of 2014, Swisher recorded a non-cash goodwill impairment charge of $5.8 million in conjunction with its impairment testing. This impairment will neither affect the company's liquidity, cash flows or future operations.

During the second quarter of 2014, the company received cash from assets held for sale totaling $700,000. Additionally, the company recorded impairment of $1 million on the remaining assets held for sale.

As of June 30, 2014 we have assets held for sale on our balance sheet of $341,000. Also on the balance sheet, we have $13.3 million in non-restricted cash and over $26 million in working capital as of June 30th. In addition, we have 4.7 million remaining as outstanding debt having paid down and additional 1.3 million in debt during the quarter. Also, during the second quarter of 2014, we spent $2.1 million on property and equipment purchases, a 54% decline from the prior year quarter. We continue to expect to spend less than $10 million on property and equipment purchases in 2014. And that number includes the planned plant consolidation currently underway.

From a liquidity standpoint, we used $4.2 million in cash in the second quarter. This reduction was due to the debt payments and capital expenditures just discussed was $1.8 million of cash used for operating activities. Our restricted cash decreased over $1 million during the quarter due to a reduction in letters of credit which back stopped our purchase card usage. There is still much work to be done to improve our operating cash flow but we expect to continue to see our operating efficiencies and cost reductions aligning with our use of cash.

Finally, we continue to focus on the remediation of our material weaknesses identified in our 2013 Form 10-K.

I’ll now turn the call back over to Bill Pierce for closing remarks.

Bill Pierce

Thank you, Bill. To sum up, we believe in our operating plan, philosophy and people, and we believe that we should start to see the year-over-year revenue growth we have been expecting in the second half of 2014 and with it, the positive financial results it should produce. Before opening it up for Q&A, I’d like to reiterate what we said at the Annual Shareholder Meeting. Our customers depend on us to keep their businesses running and what we do matters to millions of their customers on a daily basis. You’ve invested in the company with the purpose that fulfills the need in the marketplace. And finally, I want to recognize and thank the dedicated women and men at Swisher for delivering on our service promise and changing the culture of deliver to our customers.

Thank you for joining our call this morning and for your continued support. We will now open up the call to Q&A. Operator?

Question-and-Answer Session


Thank you. (Operator Instructions). And our first question comes from Andrew Wittmann. You may proceed, sir.

Andrew Wittmann - Robert W. Baird

Hi, good morning guys.

Bill Pierce

Good morning Andrew.

Bill Nanovsky

Good morning Andy.

Andrew Wittmann - Robert W. Baird

Hi. So, I guess I just wanted to dig first into the revenue outlook for year-over-year revenue growth here in the second half, Bill. Maybe if you could just give us some confidence around the trends you’ve seen since the quarter end, July so far in August; how is the year-over-year revenue trending there? You mentioned some of the strength in the pipeline; how close are you to closing on that? Just want to get a little bit more color about what we should be seeing in the top-line, what gives you confidence there?

Bill Pierce

Okay. Let me give you the 30,000 foot look from my seat, Andy and then let Blake layer on any more specifics. With respect to trend line, let’s start with the baseline and that is that if you look at the 5%, Blake covered it in his piece of business if you take out assets held for sale or that are sold. That 5% equates about $2.5 million basically. Of that, half the reduction year-over-year is in the hygiene side and franchise side, some products side; the other half does not primarily deal with our core chemical business, it deals with the remaining linen business that we do have that’s had a profitable quarter but that had some revenue declines as well as what Blake described as the ancillary products that were chemical products and paper products et cetera that were part of the products that were associated with the hygiene services or with the customers that were sold in the linen business but for which there were some additional fall off of revenue.

So the core base is we have seen the trend sure up is to be very solid in the quarter. So we’ve always said we’re going to focus on our service to give us a base to grow from and to make sure that we are maximizing the revenue from our base. So, I think you got to start with the base business. Blake addressed the steps on the core hygiene base business but on the core chemical business, the pipeline is more robust than it’s ever been. You can see from what Blake has said that we are closing on business. The pipeline is growing and I will tell you I believe that the pipeline is finally growing in the mix business that can help us win for the long-term.

I absolutely believe that folks in the trucks and the plants in their commitment to the service excellence have made a difference in protecting the base and that the dedicated sales professionals that are out there have been challenged to sell profitably or bring these wins that are adding to the bottom-line. So if you kind of look at the company, and the direct answer to your question, we believe we'll have improving fundamentals in the marketplace in the second half, we see others that believe the same thing, particularly in the restaurant hospitality industry. We believe our basis is solid and we can protect it. And we have a pipeline that’s more robust that we're getting wins on and making installations today from that has a more profitable mix that any time since I have been associated with the company.

So, all the pieces are lined up to have profitable second half. We like you and our investors need to see it show up on the P&L, so cautiously optimistic that we’ve done the work to put us in a position to drive that growth. And whether or not we have improving market fundamentals, but a little improvement in the market fundamentals certainly wouldn’t hurt.

Andrew Wittmann - Robert W. Baird

Thanks for that. So I just -- on the part of the business which is down, but core that coming to hygiene and the products, I guess the hygiene being down and have been the reason for being down, it was a little bit surprising to me; has there been de-emphasis there or -- couple of questions. One, can you remind us how big that business is for you on an annualized basis? Two, is there lack of emphasis there? And three, can you talk about the leverage effect of the hygiene business? I think of that as probably one of your most route intensive businesses and how you go and get that scale back and now you’re seeing deleveraging effect right now that concerns you or is the deleveraging effect not that big?

Bill Pierce

Okay. And I will let the Bill and Blake jump in with any detail I missed. Essentially if you just look the services portion of the business which is almost all hygiene, its about 10%. But those folks are also selling another 10% or so of products into the same customer base with paper, air fresheners and things that hit the product line if you will. So call it somewhere around 20% in terms of the sell into that customer. And you are right, it is highly levered around the efficiency of route operations for the number of stocks so as you can maximize the profitability of the [truck] and increase the revenue of the restock that you make.

Blake talked about starting to dedicate resources to it grow the business. The fact of the matter is in that business and from the time that Swisher started as a legacy hygiene business, that business has always had a relatively high customer turnover because it is a first company set, nice to have versus have to have type of a service. And the ability to do it better than someone can do with themselves at an affordable price but still be competitive is a challenge.

We have actually decreased the turnover in that business. And in this queue we are from our internal numbers appear to be lower than what the industry generally anticipates. But Blake has taking steps along with [Keith], our top sales guy to put in play with our existing Account Manager of Chemical Business the cross selling of the hygiene services into the existing customer base where it may not exist with our restaurant and hospitality customers and assisted living customers as well as to dedicate resources to go after pure hygiene related businesses that have a chance to move the needle like the 8,000 unit chain that we talked about.

And I'll stop there and let Bill or Blake jump in with anything I missed or any clarification that will help Andy get to the answer his question.

Bill Nanovsky

Andy, just a little more color on what Bill said, as we've unravel this unprofitable business, we've had some collateral issues with hygiene routes that we've also backed up away from, they weren’t unprofitable areas. So that has had some impact on the revenue growth. I'll tell you that in markets we have about 15 core hygiene markets that make up the majority of our business. And keenly focused on those, some of the things that we're trying to re-engage and rethink on is the quality of the customers that we're bringing in and part of it is trying to reduce the churn with that business and Bill mentioned it was a high churn business.

We're looking at improving the quality of the customers we're bringing in and trying to focus more and making it a complimentary service offering with our chemical customers as well. So, link the two of those and sustain.

Andrew Wittmann - Robert W. Baird

Got it. Can you, sorry.

Bill Nanovsky

So go ahead, Andy.

Andrew Wittmann - Robert W. Baird

I wondered I guess one of the other key things that we're hearing here is you are working on reducing customer churn over. Maybe how do you get better growth out of from lack of subtraction if you will? Can you give us a sense about where customer retention rates are today and how they have been trending over the last several quarters, as you have been making the changes in the organization to realign your sales and your service structure. What are they today and how much better can they be?

Bill Nanovsky

The due that we've got is an aggregate number. I'll tell you that our churn is generally is higher, churn rate is higher in our hygiene segment than it is in our chemical segment. We've developed some internal reporting that has allowed us some visibility reporting into looking at the customer churn and our numbers indicate that we’re seeing in the 40% to 50% range of customer churn reduction, okay.

And I rather than throw a number out that is I can’t, it’s not exact precise, I’d rather talk to the trend of improvement of the churn which we’re seeing improving from the beginning of the year through July and that trend continues at an accelerated rate.

Andrew Wittmann - Robert W. Baird

Got it.

Bill Pierce

Andrew this is Bill. One thing that as I look back at the quarter and look back in detail with Blake and Keith and our sales folks and what we’re doing, while I am very proud of the effort of everyone in the field around the cost efficiencies, I think somewhat of what’s going on here that you can see in the numbers is a remaking of the customer base of Swisher. And I don’t think we could have driven the bottom-line performance down or as close as it is to breakeven in the quarter without the ability of adding revenue that it was more profitable than the revenue we’re sharing, so if that makes any sense.

In absolute terms you’ve got a big drop in revenue but in the profitability of the revenue mix of the company as it is, you’ve got a significant improvement to the bottom-line along with efficiencies that we’ve implemented. I don’t think we have been able to reduce costs and improve efficiencies solely as it means of getting to the 2.1 adjusted EBITDA loss. I think a large part of it is in the remaking of our customer base toward a profitable customer and that the business that fell off or that was sold was losing more than the business is being added.

Your question is fair, when you get the past cleaned up and start so you really start to see revenue growth of that profitable revenue base and your growth at that point should have a significant impact on the bottom-line. But I think part of what we are seeing on the improvements on the bottom is because the discipline of the people in the sales force that are truly running through underwriting standards on the new business.

So you are seeing a remaking of the Swisher pipeline and new business and I think while expect and need to see that number move positive year-over-year in the remaking of that business, I don’t want to have it lost that it’s adding to the bottom-line more than any cost efficiencies in and of themselves they had I believe.

Andrew Wittmann - Robert W. Baird

Yes that makes sense. I think maybe for some perspective, can you just give us an update on where you are on the reorganization on a cost side of thing? Is that basically mostly done now where it really is about focusing I mean the conference call was directed towards the revenue line, you can talk about the rev-line here, how much left is on the cost side here that you can still go after or are you already where you need to be there?

Bill Pierce

I think investor asking that the other day I would say that we are still on our side of the 50 yard line since we are heading into football season but then obviously some of the significant things we have done around CapEx and being better managers of our resources while still growing the business, there is a big chunks of that that we attacked first up, first in. There is still a significant amount of improvement left, but we got to operate it out and it takes a little longer.

Bill Nanovsky

Andy, Bill Nanovsky. There are a lot of efforts that we are going through and have gone through that are perpetual efforts and what I mean by that is let’s use route optimization. A company in the route business that stops route optimizing is not going to progress, as you know we have issues with our IT integration processes and procedures we are continually getting better on that and that leads to cost efficiencies and reductions.

This summary of what I’m trying to convey is that we will always be driving more cost out of the organization not by cutting, but by finding efficiencies and operating at a higher level of level of efficiency.

Bill Pierce

I think it's fair to say, you continue to see the cost structure and the percentages improve and that's our expectation for the remainder of the year and into 2015.

Andrew Wittmann - Robert W. Baird

In the past you guys have given $10 million this year, $10 million last. Can you give us an update on kind of from where we stand today…

Bill Pierce

I think in the first -- Andy, I think the answers is in the numbers. I think if you do the math with the cost of sales, route expense, SG&A and CapEx, and you take the first six months for the year, I think it’s $23 million less than last year. Recognizing some of that was an unusual or non-recurring, but I think the numbers are the numbers. We’ve always said, we’ll live by the numbers, they are what they are, but I believe that number as hard as 23.4 million bucks, I mean hard dollars year-over-year, first six months versus last six months.

Andrew Wittmann - Robert W. Baird

Yes, I am going to keep going just because the question queue is a little bit light, but I do want to talk a little bit about cash flow. And is there the seasonality benefit or seasonality headwind that we could be seeing in the second half of the year. How do you expect cash flow from ops to kind of trend from here I guess is the question?

Bill Nanovsky

Andy, Bill Nanovsky again. We expect to see the positive trending in cash flow to continue over the next four quarters and beyond. The items that we remain focused on is we continue to remain focused on the working capital items we can control such as receivables and inventories. We have had a fair amount of success in those areas. We will continue to achieve reductions in working capital deployment. The performance against expectations on capital expenditures has been frankly significantly better than even we thought we would achieve. Blake and his team have really, really done a good job of measuring paybacks and executing on the capital expenditure plans.

Year-over-year, if you look at our debt structure, so much of our long-term debt and of course, we don't have that much left but so much of our long-term debt was based on the acquisitions we made back in ‘10, ‘11 and very early in ‘12. Those seller notes are now primarily maturing. And if you look at our expected debt payments in ‘15 compared to ‘14, we see almost a $5 million reduction in debt payments. There is no single bullet; we just continue to manage all of the pieces that we can manage.

Bill Pierce

Thank you, Bill. And Andy on the seasonality part of the question. Q3 is historically our best quarter. And Q4 stars to tale off a little bit. Our expectations of improving fundamentals in the second half and the pipelines and the installations that we are making today is to have an impact. If those trends all continue, you would expect to see Q3 be positive and certainly have the improving trend we are talking. And because of some pricing that we have taken that we have been able to get with the higher level value customers that we have and the pipeline, you would expect and we would expect Q4 to be improving and not be as soft as it has been in the past.

We got to go out and get that, but the expectation will be that that's kind of what we should see, if this trend continues the way that we're – if we execute and see an improving market fundamental, a better Q3 starting to move ahead year-over-year and a Q4 that is not as soft to Q3 as it was in the past, because now we've gotten some pricing and we've added installations and the pipeline is more robust. And the numbers will tell us how we're doing on that.

Andrew Wittmann - Robert W. Baird


Bill Nanovsky

And to the extent that there is some business that isn't making money for us, that falls off, that pulls that top number down. We should see the improvement on the bottom line as we've seen in this quarter.

Andrew Wittmann - Robert W. Baird

And then just other sources of cash, it looks like the disco-ops you got in your K there, I don't know any, but is that under contract and are there other assets in the business that maybe are some discontinued ops that are potentially being contemplated for sale as well as you look to focus in dense geographies and what could those proceeds potentially be in still this calendar year, if any?

Bill Nanovsky

Andy as Blake mentioned during his presentation, we did close on one of the two remaining assets held for sale in July and we have one more sale to go. We are in active discussions, we're not under contract, but we are in active discussions with the gentlemen whom we believe is a very, very serious buyer.

Andrew Wittmann - Robert W. Baird

Is that sort of discontinued operations or is that for something else?

Bill Nanovsky

That is assets held for sale not discontinued ops.

Andrew Wittmann - Robert W. Baird

Yes, sorry assets for sale. Sorry, got it.

Bill Nanovsky

And Bill Pierce would you like to hand all the other considerations?

Bill Pierce

Yes, Andy absolutely the right question to ask, we ask ourselves that question all the time and we obviously monitor very closely with respect to where our plan is, and availability of cash. And we -- trust me, we continually evaluate our options to improve our liquidity and our capital resources and are focused on that.

Andrew Wittmann - Robert W. Baird

Right. I think my 15 minutes for Q&A are probably enough for now. I’ll leave it there and thanks.

Bill Pierce

Good questions. Thank you.

Bill Nanovsky

Thank you Andy.


And our next question comes from Bill (inaudible). You may proceed.

Bill Pierce

Good morning Bill.

Unidentified Analyst

Great questions, now in my flip to ask there, so I just had a curiosity from a ground level. What can these, your service left out in the field what kind of career can they expect, from an incentive basis, I mean I know you guys are driving from the operational side, these guys I am just wondering what kind of career can they build for themselves?

Bill Pierce

And implied in that Bill and I don’t want to expand it beyond what you missed, can we seek and retain the people that we need to win and I am going to pitch that to Blake Thompson.

Blake Thompson

Great question. These are very good careers. I came out of the food industry, different route based system and when you look at our industry and the opportunities for our service folks in the field and where we’re headed with our reorganization, restructuring remodeling of our business, our service reps are becoming more sales folks they are managing books of business. We’re developing their skills to have better selling skills and relationships with the customers to be able to retain and sell up the customers that are there in geographies where we don’t have density. We expect our service reps, our sales guys in the field to be out developing new business opportunities as well with new customers.

So, you have it’s a base plus commission system and as they grow their book and we support them in growing their booking, providing them service support, they are able to make pretty good money and have a longer career with the organization.

Bill Pierce

Bill I would like to add a few comments to that and that’s that the company is very much focused on a promote-from-within philosophy and we like nothing better than rewarding our great performers with more challenges and a position with more responsibilities.

Unidentified Analyst

Thank you very much, guys you are doing a good job, I hope the trends continue. Appreciate the hard work.

Bill Pierce

Thank you

Bill Nanovsky

Thank you, Bill.


I’m not showing any further questions in the queue, I’d like to turn the call back over to Bill Pierce for any further remarks.

Bill Pierce

Thank you [Demetrius]. We appreciate everyone’s attendance, and your commitment to Swisher, certainly we are committed and we are going to hang up and get back to work. Thanks so much.


Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And may all disconnect. Everyone have a great day.

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